Virgin Media mulls own news channel

Virgin Media is considering launching a news channel to rival Sky News with ITN as its content supplier.

Virgin Media is considering launching a news channel to rival Sky News with ITN as its content supplier.

If given the go-ahead, Virgin News is likely to be a 24-hour rolling news channel, although the company is also understood to be looking into launching a broadband news channel.

Earlier this year, BSkyB's basic channels - including Sky One, Sky Sports News and Sky News - were withdrawn from Virgin's platform, following a row between the two companies over the cost of carriage.

Since then Virgin Media has been working towards the launch of general entertainment channel Virgin 1 and is joining forces with Setanta Sports to launch a sports news channel. Launching a general news channel would mean Virgin Media would completely replace the Sky services its customers have lost.

A loss-leader?

A source involved in discussions said: 'It makes sense that a news channel will be next, although they are hugely expensive to run and it is a crowded market place. [Virgin Media content chief] Malcolm [Wall] will not do it unless he is happy that it is the right thing to do.'

Wall is understood to be spearheading the initiative.

Rolling news channels are costly and are typically loss-leaders. For example, Sky News is understood to cost around £40m per year to run but recoups just half of this, running at a £20m loss. BBC News 24 cost £52.8m to run in 2006.

Another executive source said that the move would be a way of adding to Virgin Media's credibility. 'Broadcasters gain credibility through their news output,' the source said.

'Virgin lacks a bit of this as it is associated more with showbiz and entertainment. A news channel is a huge investment but the payoff is the credibility you get for it.'

ITN and Virgin

ITN used to supply the now-defunct 24-hour news channel ITV News, which the commercial broadcaster ditched in early 2006. ITN currently supplies ITV's -terrestrial news and Channel 4 News.

It has several deals in place with Virgin Media supplying Virginmedia.co.uk's news content. ITN also has a mobile channel, ITN News, on the BT Movio service on Virgin Mobile. BT Movio is closing at Christmas.

A news executive said that expanding its contracts base was a key priority for ITN in the future. 'The reality is that ITN relies on ITV News and C4 News. ITN is keen to try and diversify and to attract other news contracts.'

ITN declined to comment and Virgin Media was unavailable.